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Queensland residential real estate body welcomes RBA rate change

December 08, 2011

The interest rate change made by the Reserve bank of Australia was the right call to make, according to a leading industry body.

Managing director at the Real Estate Institute of Queensland Dan Molloy said that the reduction of 25 basis points from the RBA cash rate showed that economic inflation was well under control and would serve to ease the burden on homeowners.

Molloy asserted: "With the federal government's continued determination to record a budget surplus now dependent on spending cuts, only the Reserve Bank remains capable of stimulating spending and restoring some confidence to the market."

Residential property markets in Queensland had previously been subject to reduced buyer confidence and slowed turnover in some regions - which the RBA's previous decision to change the cash rate to 4.5 per cent had only slightly addressed.

He went on to say that the financial situation in overseas markets would most likely have a powerful impact on local confidence.

"The worsening economic situation in Europe, coupled with these benign inflation readings, means the Reserve could safely reduce the cash rate towards a more neutral setting, particularly since its next meeting is not until February," said Molloy.